India scored high in this year's Global Competitiveness Index, jumping 16 ranks to come 55th in the world, ending five straight years of declines. A closer look tells us that the big themes of the government have paid off in improvements in key rankings.
The biggest improvements (see above) have been in the campaign themes of 2014 - a decline in corruption and favoritism by public officials in business decisions, and fewer regulations. India has improved its ranking in corruption indicators and now ranks between 30-40 in favortism by public officials, and overall ethics and corruption. Corporate accountability and disclosures have also seen big jumps. The country also logged improvements in road infrastructure and electricity availability.
Top ten in venture capital availability
In a time when China is slowing, India is seen as the next big source of growth, and this is reflected in the fact that the country has hit the top ten in venture capital availability. ?This is the metric where India scores the highest. India has also seen big jumps in reforming hiring and firing practices, and protection of intellectual property.
Worst declines
Anyone who has followed the news headlines know this already: inflation remains a hard to tackle problem, and we rank 101 out of 138 countries due to our inflation rate. We have failed to rein it in to the target 5%, which the RBI has repeatedly said is required for the interest rate cuts the FM so badly wants. Growth and high inflation are a wobbly balance, and this may continue to be a speedbreaker for growth and increasing customer spending.
With IT services on the downswing, exports have also taken a hit. We are not doing too well either in primary and higher education rankings. Fewer children are enrolling in schools now compared to the UPA years, and this backsliding doesn't bode well for longer-term growth.
Biggest challenge
India still has one of the highest budget deficits in the world - we rank 119. The last couple of years has seen the country move in the right direction - the government's push for the use of Aadhaar in providing benefits and public services will be key to further reducing leakages and spends. Agricultural reform remains the one big bear that no Central government wants to poke, and unless there is reform and better policy in this sector, deficits will remain high.
